November 2013 International Trade (Pulp, Paper & Paperboard)

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Exports of pulp, paper and paperboard decreased by 24,000 metric tons (1.0 percent) in November. Imports rose, but by a more modest 5,000 tonnes (0.7 percent). Exports were 76,000 tonnes (3.0 percent) below year-earlier levels while imports were 13,000 tonnes (1.5 percent) higher. Net exports slid by 1.8 percent relative to October, and were 3.8 percent below November 2012. Year-to-date (YTD) net exports were running 5.8 percent behind the levels seen during the comparable period in 2012.

The drop in November exports compared to October was led by Taiwan (a 23,000 tonne drop compared to total decline of 24,000 tonnes). November's increase in imports was led by Canada (a 23,000 tonne increase compared to total increase of 5,000 tonnes). Looking at the cumulative net exports over the past six months through November, net exports have fallen by just over 6 percent compared to the same six months one year ago. Despite this, exports, imports, and net exports have all been slightly increasing over the past six months on a trend line basis. 

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Year-to-date pulp exports (24.123 million tonnes through November) are down by 3.7 percent compared to the same period in 2012. China remains the chief destination of U.S. pulp exports representing nearly 58 percent of total U.S. pulp exports YTD. Nevertheless YTD pulp exports to China have declined by 5 percent. Among the top 15 destinations for U.S. pulp exports in 2013, Indonesia, Taiwan, and Belgium have all logged significant percentage increases. In terms of rankings, Taiwan, logging a 14.6 percent increase in year-to-date pulp exports receipts, switched places from 11^th to 10^th with the Netherlands, which posted a 20.8 percent drop in YTD pulp export receipts. Belgium, with its 166.5 percent increase YTD, has jumped from the 20^th ranked destination in 2012 to the 13^th ranked in 2013. 

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YTD paper and paper board exports (2.371 million tonnes through November) are up by 7.2 percent compared to the same period in 2012. Mexico and Canada are in essentially a dead heat as destinations for U.S. paper and paperboard exports YTD through November; Mexico holds a slim lead at 22.4 percent of total U.S. exports while Canada checks in at 22.0 percent. The notable change between these two countries between 2012 and 2013 is Canada's receipt of U.S. paperboard exports are up nearly 49 percent while U.S. paperboard exports to Mexico are up a scant 0.6 percent year-to-date. The Canadian increase more than accounts for the entire change seen in exports YTD. The top five ranked countries remain identical between 2012 and 2013 and account for 64 percent of the total exports; the top 20 countries account for nearly 89 percent of the total exports. In terms of ranking among the top 20 in 2013, the largest ranking improvement is Pakistan, ranked 14^th in 2013, up from 31^st in 2012, with an over 300 percent increase in receipts of U.S. paper and paperboard exports. The biggest decline in ranking is Venezuela, dropping from 9^th place in 2012 to 13^th in 2013 on a 16.3 percentage drop on receipts of U.S. paper and paperboard exports. 

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YTD pulp imports (5.854 million tonnes through November) are up by 4 percent compared to the same period in 2012. Canada remains the chief source of U.S. pulp imports, representing nearly 65 percent of total YTD. However, while Canada has posted a small decline on a percentage basis on a YTD basis (1.4 percent) the next three countries in terms of rank all show significant increases in pulp imports into the U.S.:

·   Brazil, ranked 2^nd in both 2012 and 2013 has increased by 12.6 percent on a YTD basis;

·   Chile, ranked 4^th in 2012 and 3^rd in 2013, has increased its imports by 148.1 percent;

·   Mexico, despite falling from 3^rd-ranked pulp import source in 2012 to 4^th place in 2013, increased YTD pulp imports by 35.1 percent.

Sweden and France, ranked 5^th and 6^th in both 2012 and 2013, respectively, are showing double-digit percentage drops in pulp imports. The top six ranked sources account for over 99 percent of 2013 pulp imports. 

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YTD paper and paperboard imports (2.919 million tonnes through November) are up by 4 percent compared to the same period in 2012. Canada remains the chief source of U.S. paper and paperboard imports, representing over 89 percent of the total YTD. Given the magnitude that Canadian imports represent of the total, no surprise the YTD change for Canada (3.5 percent) is close to the total change (4.0 percent). The top five ranked countries between 2012 and 2013 remain the same; in fact, the only change in ranking among the top 10 countries between both years is a switch between Germany (7th to 6^th) and South Korea (6^th to 7^th). Among the top five ranked countries, which in aggregate represent 96 percent of total imports, Finland posted the largest percentage gain (42.1 percent) and Sweden the largest percentage loss (10.8 percent). On a regional basis, after North America, the region of the world showing the largest increase in paper and paperboard imports into the U.S. is Europe, with a 25 thousand tonne (22 percent) increase.

The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.